India: Monsanto Served Notice For Revocation Of Its Bt Cotton Patent

According to The Indian Express, a leading Indian daily, the
Department of Industrial Policy and Promotion (DIPP) has recently
served a show cause notice to Mahyco Monsanto Biotech (India)
Private Limited (MMBL) on March 03, 2016, calling upon it to
explain why its patent for the Bt cotton technology should not be
revoked under the provisions of the Indian Patents Act, 1970. The
reason for this being, that the patented product, which MMBL claims
to be resistant to pink bollworms, is allegedly no longer working
as claimed.

Brief Background

Monsanto is an American multi-national corporation known for its
contribution to the field of genetically modified crops around the
world. In India, Monsanto sells a genetically modified version of
Cotton seeds known as Bt Cotton and marketed as Bollgard
(containing the Cry1Ac protein / Mon-531 gene) and Bollgard-II
through their Indian counterpart MMBL. Bt Cotton is claimed to
contain an insecticidal protein, whose gene has been derived from a
soil bacterium called Bacillus thuringiensis (Bt), making
the seed resistant to bollworm attacks. The 2014-2015 Annual Report
of the Cotton Association of India has stated that the acreage
under Bt cotton in the country has reached to 96% of the total
acreage of around 129.71 lakh hectares where Bt cotton is
cultivated. This data shows the overwhelming use of Bt Cotton for
cultivation with almost the entirety of the seeds used being
manufactured by Monsanto.

Patenting History of Bollgard and Bollgard-II

Monsanto was first granted a patent for the first version of
their Bt Cotton seed, Bollgard in the United States in 1992, which
expired in 2012. In India, Monsanto tied up with Mahyco (which
later became Mahyco Monsanto in 1998) to import Bollgard. The
Genetic Engineering Appraisal Committee (GEAC) gave Monsanto
permission to commercially release Bollgard in 2002 and Bollgard-II
in 2006. Interestingly, it appears from a brief research that
Monsanto did not file for grant of a patent for Bollgard in
India.

In 2008, an indigenous seed containing the Cry1Ac gene was
developed by researchers at the University of Agricultural Sciences
(UAS), Dharwad, Karnataka in India. However, reportedly, under the
assumption that Monsanto had a patent on this gene, UAS was not
allowed to sell the seed commercially on the directions of the
Ministry of Environment and Forests1.

Bollgard-II involves the introduction of Cry1Ac and Cry2Ab genes
from Bt into cotton plants and Monsanto claimed that it conferred
resistance against American bollworm, pink bollworm and spotted
bollworm. Through Indian Application no.
1947/CHENP/2003, Monsanto was granted a patent
(Patent No. 232681) for the cottonseeds on March
20, 2009 w.e.f. June 05, 2002.

Failure of Bollgard and Bollgard-II

In 2009, Bollgard began to fail as bollworms became resistant to
the Cry1Ac gene. According to a press note issued by Monsanto,
resistance to Cry1Ac was seen in only four districts in the Indian
state of Gujarat i.e. Amreli, Bhavnagar, Junagarh and Rajkot.
Further, according to the information provided on the company's
website, no insect resistance has been confirmed outside the four
districts in Gujarat2.

The company recommended that it would be safer for the farmers
to adopt Bollgard-II instead.

In 2015, it was first reported by the Central Institute of
Cotton Research (CICR) that Bollgard-II has also started to develop
pink bollworm3. Surveys have indicated that the damage
to the cotton crop from pink bollworm attacks are
"particularly severe" in Gujarat with an estimated 9 per
cent yield loss, and it was found to have spread to wider areas.
Monsanto said that while results of the CICR study were awaited,
internal studies indicated resistance by pink bollworm in some
districts of Gujarat to Cry2Ab protein, a key component of Bollgard
II. This has reportedly been proliferated by improper insect
resistance management practices, absence of refuge (non-Bt seeds),
and spread of illegal seeds4.

Revocation of Patent?

Revocation of a patent can be done under Section 64 or Section
66 of the Indian Patents Act, 1970. Section 64 provides for
revocation of patents, as long as certain grounds as laid down are
met. An application for the revocation of a patent can be made by
any interested party or the Central Government. The important
provision with regard to this situation is Section 64(1)(g) which
provides that an application for revocation can be made if the
invention is not useful. This raises the question as to what
constitutes "not useful" i.e. whether it includes a
situation where the invention does not work at all or does not
produce the desired result claimed in the patent specification.

In this regard it may be pertinent to note the judgment of the
Bombay High Court in Farbewerke Hoechst v. Unichem Labs and
Ors. [AIR 1969 Bom 255], where it was observed in
paragraph 17 that even if the amount of utility of an invention is
very small, if an invention is of some use to the public it is
considered sufficiently useful. Further in paragraph 20 of
Farbewerke, the Court observed that:

""not useful" in patent law means that... it
will not do what the specification promises that it will do. If the
invention will give the result promised at all, the objection on
the ground of want of utility must fail".

In view of the above, it appears that if the specification in
Monsanto's patent on Bollgard-II claims that the invention is
resistant/ tolerant to pink bollworms but is no longer displaying
that resistance and the invention is not giving the result
promised, grounds for revocation can be made out.

Other Legal Disputes

Interestingly, Monsanto is also facing legal challenges on the
price at which the Bt cotton seeds are sold to the public.
Cottonseed is an essential commodity under Section 2(a)(ix) of the
Indian Essential Commodities Act, 1955. Under Section 3(2)(c) of
the Act, the Central Government can make orders for controlling the
price at which cottonseed can be sold. The Central Government
issued the Cotton Seed Price Control Order, 2015 on December 07,
2015 [G.S.R. 936(E)] for controlling the price at which Bt cotton
seeds can be sold in India. The said Order created a panel which
would fix the maximum price of Bt Cotton seeds. On March 08, 2016
vide Standing Order bearing No. S.O. 686(E), the Central Government
fixed the Maximum Sale Price of Bollgard-II at INR 800 with the
Trait Rate being fixed at INR 495.

Monsanto challenged the Order in Mahyco Monsanto Biotech
(India) Pvt. Ltd. and Anr. v. Union of India and Ors [W.P. (C)
12069/2015] before the Delhi High Court asking for a stay
which was refused by the Court who asked for the Central Government
to file a counter affidavit on March 04, 2016. The Court on March
04, 2016 heard in part impleadment applications and ordered that
the matter be listed for the end of the board on March 09,
20166. On March 09, 2016, the National Seed Association
of India, Bhartiya Janta Kisan Morcha and Indian Kisan Sabha were
impleaded as respondents and the matter has been listed for hearing
and disposal on March 23, 20167.

In a combined judgment dated February 10, 2016 in Re:
Department of Agriculture, Cooperation and Family Welfare And M/s
Mahyco Monsanto Biotech (India) Limited (MMBL) [Reference Case no.
2 of 2015] and M/s Nuziveedu Seeds Limited &
Ors. And M/s Mahyco Monsanto Biotech (India) Limited & Ors.
[Case no. 107 of 2015], the Competition Commission of
India (CCI) has ordered that the Director General (DG) make a
detailed probe into alleged abuse of dominance by MMBL. The CCI was
of the view that there exists a prima facie case of
contravention of the provisions of Section 3(4) and Section 4 of
the Indian Competition Act, 2002. The CCI has also asked the DG to
submit his report within 60 days.

Conclusion

The patentability of Monsanto's Bt cottonseeds, sold as
Bollgard-II, is facing challenge at present as the cottonseeds are
allegedly no longer functioning as claimed by the company in its
specification. The present issue has opened up the possibility that
a patent may be revoked under Section 64(1)(g) of the Patents Act
for being "not useful", and may thereby set a precedent
where a patent may be revoked if, after a period of time, the
product or invention is no longer able to produce the same result
as promised due to a build-up of tolerance. The eventual outcome in
this matter however is yet to be seen.

The Patents Act 1970, along with the Patents Rules 1972, came into force on 20th April 1972, replacing the Indian Patents and Designs Act 1911. The Patents Act was largely based on the recommendations of the Ayyangar Committee Report headed by Justice N. Rajagopala Ayyangar. One of the recommendations was the allowance of only process patents with regard to inventions relating to drugs, medicines, food and chemicals.

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